Boohoo Enters Beauty Category

The U.K.-based retailer is the latest fast-fashion player to go into the category.

In less than a year, Boohoo.com plc has become a multibrand portfolio with a U.S. foothold that's about to stake its claim in an entirely new category.The U.K-based fast-fashion e-tailer is gearing up for its next endeavor, today introducing Boohoo Cosmetics on its U.K. and U.S. e-commerce sites. The entrée into beauty follows a highly publicized sale of Nasty Gal's intellectual property for $20 million and acquiring the majority of the company operating the online brand PrettyLittleThing within a few month's time.It also could be the company's attempt to grab market share from Topshop, H&M and Forever 21 — which have all introduced beauty in the past few years. The category is being touted as the new battleground for fast-fashion players, with Boohoo rounding out the group."It's definitely on 'on point' at the moment so it can only enhance our range," said Carol Kane, Boohoo chief executive officer, when asked if she thinks companies need to enter the beauty category to maintain relevancy. She noted that it's a great opportunity, "especially with all the contouring [and] eyebrow trends.""Our DNA as a brand is to test and learn and repeat — that's what we do with everything," said Natalie McGrath, Boohoo.com's vice president of marketing, North America, citing the launch of a small premium collection a few months ago. "It was a test…it worked very well and we're looking at launching our second premium [collection]. That's what sets us apart from our competition."The selection of 10 products, to start — the range will extend to 29 products, or 200 stockkeeping units, in the coming weeks — is billed as highly trend driven and includes contour and highlighting palettes, lip kits, primers and setting sprays. Pigmented eye shadow in copper gold, Champagne highlighters and shades of berry lipstick comprise the inaugural collection that hits Boohoo.com. Priced in line with the e-tailer's vast assortment of apparel and accessories, product ranges from $5 to $25.McGrath maintained that the target demographic is boohoo’s existing customer. The e-tailer is not looking to diversify it’s audience.“It's adding to the offering that we currently have today with our current audience. It certainly will help our awareness with people who are more focused on beauty than fashion. [But] in terms of our core demographic, that's not changing,” McGrath explained.From a marketing perspective, though, McGrath views it as an additional avenue to partner with bloggers and vloggers. For her, it’s an opportunity to engage with an entirely new set of influencers outside of the fashion space."The beauty influencer piece is massive, and we get to go down that route.…It gives you another talking point," McGrath said.Analysts agree.Jane Hali, chief executive officer of Jane Hali & Associates, believes that entering the beauty space is also "a great way to create awareness with influencers on YouTube and provide more social media content which directly affects sales." She also sees it as a way to raise the price of the ultimate sale, where consumers tacking beauty products onto orders could quickly turn a $24 sale into a $50 one.“Beauty is easier to market on social media. Ultimately, it helps with overall brand awareness, but I don't think it's the primary reason these people are getting into beauty,” said Ilya Seglin, managing director at Threadstone Advisors.Seglin called beauty a “highly attractive” category as a whole due to “good margins, fast turns…[and retailers] don’t need to be as promotional as with apparel."McGrath was careful to call the launch a "test," stating that she doesn’t think the company will ever divert its core focus away from fashion. And just like its existing pure-play business, the beauty category will live solely online — the longstanding vision of Kane. Kane is outspoken about her aversion to brick-and-mortar retail — excluding pop-ups and physical retailer destinations that serve as marketing opportunities — because it hinders speed to market.And speed to market and constant newness is one of the company’s strengths.McGrath maintained that the company will jump to expand and up the production runs — and quickly — of Boohoo Cosmetics if the offering resonates with consumers. For reference, when Boohoo reintroduced Nastygal earlier this year, the new site quickly jumped from 400 styles to more than 1,100 styles, with only two hours of downtime during Boohoo’s relaunch. Boohoo drops, on average, 200 new units of product per day on its site. Last year, Boohoo posted revenues of more than 294.6 million pounds, a 51 percent increase from 2015."Is there a long-term strategy for cosmetics? No. Because nothing we do sits on a long-term strategy," McGrath said. "If we think the demand is there, then yes we will turn it around very quickly."

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